ON Semiconductor Corporation (Nasdaq:
ONNN) today announced that total
revenues in the third quarter of 2013 were $715.4 million, up
approximately four percent compared to the second quarter of 2013.
During the third quarter of 2013, the company reported GAAP net income
of $51.8 million, or $0.11 per diluted share. The third quarter 2013
GAAP net income was impacted by approximately $23.6 million of special
items. The complete special items detail can be found in the attached
schedules.

Third quarter 2013 non-GAAP net income was $75.4 million, or $0.17 per
diluted share, compared to $57.2 million, or $0.13 per diluted share,
for the second quarter of 2013. A reconciliation of these non-GAAP
financial measures (and other non-GAAP measures used elsewhere in this
release, such as non-GAAP gross margin and adjusted EBITDA) to the
company's most directly comparable measures prepared in accordance with
U.S. GAAP are set forth in the attached schedules and on our website at
http://www.onsemi.com.
Additionally, revenue by end market, region, distribution channel and
business unit can be found on the "Investors" section of our website.

On a mix-adjusted basis, average selling prices for ON Semiconductor in
the third quarter of 2013 were down approximately one percent when
compared to the second quarter of 2013. Total company GAAP gross margin
in the third quarter was 34.8 percent. Non-GAAP gross margin in the
third quarter was 34.8 percent.

Adjusted EBITDA for the third quarter of 2013 was $128.8 million.
Adjusted EBITDA for the second quarter of 2013 was $112.4 million.

"The demand environment has been choppy and demand trends have lagged
the typical seasonality in our industry,” said Keith Jackson, president
and CEO of ON Semiconductor. “Despite a sub-optimal demand environment,
our core business remains strong with a robust design win pipeline in
our target growth areas of automobiles, smartphones, white goods and
select segments of the industrial market.

"At the same time, the headwind to our results from the SANYO
Semiconductor Products Group continues to abate as our efforts in
stabilizing revenue and optimizing cost structure of the business are
beginning to show definitive results. With the measures we recently
announced, we believe that we now have a clear line of sight to
sustained profitability for our SANYO Semiconductor business from 2014
onwards."

FOURTH QUARTER 2013 OUTLOOK

“Based upon product booking trends, backlog levels and estimated turns
levels, we anticipate that total ON Semiconductor revenues will be
approximately $675 to $705 million in the fourth quarter of 2013,”
Jackson said. “Backlog levels for the fourth quarter of 2013 represent
approximately 80 to 85 percent of our anticipated fourth quarter 2013
revenues. Average selling prices for the fourth quarter of 2013 are
expected to be down approximately one percent when compared to the third
quarter of 2013. The outlook for the fourth quarter of 2013 includes
stock-based compensation expense of approximately $7 to $9 million.”

The following table outlines ON Semiconductor's projected fourth quarter
of 2013 GAAP and non-GAAP outlook.

Diluted share count can vary for, among other things, the actual
exercise of options or vesting of restricted stock units, the
incremental dilutive shares from all of the company's convertible
senior subordinated notes, and the repurchase or the issuance of
stock or convertible notes or the sale of treasury shares.

Regulation G and other provisions of the securities laws regulate
the use of financial measures that are not prepared in accordance
with GAAP. We believe these non-GAAP measures provide important
supplemental information to investors. We use these measures,
together with GAAP measures, for internal managerial purposes and
as a means to evaluate period-to-period comparisons. However, we
do not, and you should not, rely on non-GAAP financial measures
alone as measures of our performance. We believe that non-GAAP
financial measures reflect an additional way of viewing aspects of
our operations that - when taken together with GAAP results and
the reconciliations to corresponding GAAP financial measures that
we also provide in our releases - provide a more complete
understanding of factors and trends affecting our business.
Because non-GAAP financial measures are not standardized, it may
not be possible to compare these financial measures with other
companies' non-GAAP financial measures, even if they have similar
names.

TELECONFERENCE

ON Semiconductor will host a conference call for the financial community
at 5:00 p.m. Eastern Daylight Time (EDT) on October 31, 2013 to discuss
this announcement and ON Semiconductor’s results for the third quarter
of 2013. The company will also provide a real-time audio webcast of the
teleconference on the Investors page of its website at
http://www.onsemi.com.
The webcast replay will be available at this site approximately one hour
following the live broadcast and will continue to be available for
approximately 30 days following the conference call. Investors and
interested parties can also access the conference call through a
telephone call by dialing (888) 291-2604 (U.S./Canada) or (760) 536-5202
(International). In order to join this conference call, you will be
required to provide the Conference ID Number – which is
80548201. Approximately two hours following the live broadcast, the
company will provide a dial-in replay that will continue to be available
through November 7, 2013. To listen to the teleconference replay, call
(855) 859-2056 (U.S./Canada) or (404) 537-3406 (International). You will
be required to provide the Conference ID Number – which is 80548201.

About ON Semiconductor

ON Semiconductor (Nasdaq:
ONNN) is driving innovation in energy
efficient electronics, empowering design engineers to reduce global
energy use. The company offers a comprehensive portfolio of energy
efficient power and signal management, logic, discrete and custom
solutions to help customers solve their unique design challenges in
automotive, communications, computing, consumer, industrial, LED
lighting, medical, military/aerospace and power supply applications. ON
Semiconductor operates a responsive, reliable, world-class supply chain
and quality program, and a network of manufacturing facilities, sales
offices and design centers in key markets throughout North America,
Europe and the Asia Pacific regions. For more information, visit
http://www.onsemi.com.

ON Semiconductor and the ON Semiconductor logo are registered
trademarks of Semiconductor Components Industries, LLC.All other
brand and product names appearing in this document are registered
trademarks or trademarks of their respective holders.Although
the company references its website in this news release, information on
the website is not to be incorporated herein.

This document contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. All statements,
other than statements of historical facts, included or incorporated in
this document could be deemed forward-looking statements, particularly
statements about the future financial performance of ON Semiconductor.
These forward-looking statements are often characterized by the use of
words such as “believes,” “estimates,” “expects,” “projects,” “may,”
“will,” “intends,” “plans,” "should" or “anticipates,” or by discussions
of strategy, plans or intentions. All forward-looking statements in this
document are made based on our current expectations, forecasts,
estimates and assumptions, and involve risks, uncertainties and other
factors that could cause results or events to differ materially from
those expressed in the forward-looking statements. Among these factors
are our revenues and operating performance, poor economic conditions and
markets (including current financial conditions), effects of exchange
rate fluctuations, the cyclical nature of the semiconductor industry,
changes in demand for our products, changes in inventories at our
customers and distributors, technological and product development risks,
enforcement and protection of our intellectual property rights and
related risks, availability of raw materials, electricity, gas, water
and other supply chain uncertainties, our ability to effectively shift
production to other facilities when required, in order to maintain
supply continuity for our customers, variable demand and the aggressive
pricing environment for semiconductor products, our ability to
successfully manufacture in increasing volumes on a cost-effective basis
and with acceptable quality for our current products, competitor
actions, including the adverse impact of competitor product
announcements, pricing and gross profit pressures, loss of key
customers, order cancellations or reduced bookings, changes in
manufacturing yields, control of costs and expenses and realization of
cost savings and synergies from restructurings (including the voluntary
retirement programs for employees in our SANYO Semiconductor Products
Group), significant litigation, risks associated with decisions to
expend cash reserves for various uses such as debt prepayment, stock
repurchases or acquisitions rather than to retain such cash for future
needs, risks associated with acquisitions and dispositions (including
difficulties encountered in accurately predicting the future financial
performance of acquired businesses), risks associated with our
substantial leverage and restrictive covenants in our debt agreements
that may be in place from time to time, risks associated with our
worldwide operations, including foreign employment and labor matters
associated with unions and collective bargaining arrangements, as well
as man-made and/or natural disasters affecting our operations and
finances/financials, the threat or occurrence of international armed
conflict and terrorist activities both in the United States and
internationally, risks and costs associated with increased and new
regulation of corporate governance and disclosure standards, risks
related to new legal requirements and risks involving environmental or
other governmental regulation. Additional factors that could cause
results to differ materially from those projected in the forward-looking
statements are contained in ON Semiconductor's 2012 Annual Report on
Form 10-K filed with the Securities and Exchange Commission ("SEC") on
February 26, 2013 ("2012 Form 10-K"), Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K and other of our filings with the SEC. You
should carefully consider the trends, risks and uncertainties described
in this document, the 2012 Form 10-K and other reports filed with or
furnished to the SEC before making any investment decision with respect
to our securities. If any of these trends, risks or uncertainties
actually occurs or continues, our business, financial condition or
operating results could be materially adversely affected, the trading
prices of our securities could decline, and you could lose all or part
of your investment. Readers are cautioned not to place undue reliance on
forward-looking statements. We assume no obligation to update such
information. All forward-looking statements attributable to us or
persons acting on our behalf are expressly qualified in their entirety
by this cautionary statement.

ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIESUNAUDITED
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA* ANDNET
CASH PROVIDED BY OPERATING ACTIVITIES(in millions)

Quarter Ended

Nine Months Ended

September 27,2013

June 28,2013

September 28,2012

September 27,2013

September 28,2012

Net income

$

52.8

$

48.7

$

13.4

$

124.8

$

50.6

Adjusted for:

Restructuring, asset impairments and other, net

11.0

6.1

11.2

11.1

57.3

Interest expense

9.2

9.3

13.6

28.6

43.4

Interest income

(0.3

)

(0.4

)

(0.3

)

(1.0

)

(1.1

)

Loss on debt exchange

—

—

7.8

3.1

7.8

Income tax provision (benefit)

4.2

(2.6

)

6.5

4.0

17.8

Net income attributable to non-controlling interest

(1.0

)

(1.0

)

(0.9

)

(2.7

)

(3.0

)

Depreciation and amortization

52.9

52.3

61.3

156.5

182.7

Actuarial losses on pension plans and other pension benefits

—

—

—

13.6

3.4

SANYO Semiconductor inventory item

—

—

3.1

—

8.0

SANYO Semiconductor purchase agreement

—

—

—

—

(2.2

)

Adjusted EBITDA*

128.8

112.4

115.7

338.0

364.7

Increase (decrease):

Restructuring, asset impairments and other, net

(11.0

)

(6.1

)

(11.2

)

(11.1

)

(57.3

)

Interest expense

(9.2

)

(9.3

)

(13.6

)

(28.6

)

(43.4

)

Interest income

0.3

0.4

0.3

1.0

1.1

Income tax benefit (provision)

(4.2

)

2.6

(6.5

)

(4.0

)

(17.8

)

Net income attributable to non-controlling interest

1.0

1.0

0.9

2.7

3.0

Actuarial losses on pension plans and other pension benefits

—

—

—

(13.6

)

(3.4

)

SANYO Semiconductor inventory item

—

—

(3.1

)

—

(8.0

)

SANYO Semiconductor purchase agreement

—

—

—

—

2.2

(Gain) loss on sale or disposal of fixed assets

(0.5

)

0.3

(2.7

)

(7.6

)

(4.7

)

Amortization of debt issuance costs

0.3

0.3

0.6

0.9

1.7

Provision for excess inventories

5.8

24.0

3.3

45.7

30.6

Non-cash asset impairment charges

2.9

0.6

2.1

3.5

2.1

Non-cash share-based compensation expense

7.0

10.6

2.1

23.4

14.7

Non-cash interest

2.7

2.7

5.5

8.5

18.7

Non-cash foreign currency translation gain

—

—

—

(21.0

)

—

Deferred income taxes

0.7

(6.9

)

1.4

(5.7

)

3.4

Other

0.1

(0.3

)

(0.8

)

—

(1.4

)

Changes in operating assets and liabilities

(64.8

)

(77.1

)

(82.1

)

(131.8

)

(166.8

)

Net cash provided by operating activities

$

59.9

$

55.2

$

11.9

200.3

139.4

*

Adjusted EBITDA represents net income before interest expense,
interest income, provision for income taxes, depreciation and
amortization expense and special items. We use the adjusted EBITDA
measure for internal managerial evaluation purposes, as a means to
evaluate period-to-period comparisons and as a performance metric
for the vesting/releasing of certain of our performance-based
equity awards. Adjusted EBITDA is a non-GAAP financial measure.
Regulation G and other provisions of the securities laws regulate
the use of financial measures that are not prepared in accordance
with generally accepted accounting principles. We believe this
measure provides important supplemental information to investors.
However, we do not, and you should not, rely on non-GAAP financial
measures alone as measures of our performance.

We believe that non-GAAP financial measures reflect an additional
way of viewing aspects of our operations that – when taken
together with GAAP results and the reconciliations to
corresponding GAAP financial measures that we also provide in our
press releases – provide a more complete understanding of factors
and trends affecting our business. Because non-GAAP financial
measures are not standardized, it may not be possible to compare
these financial measures with non-GAAP financial measures used by
our company or other companies, even if they have similar names.

To supplement the consolidated financial results prepared under GAAP, ON
Semiconductor uses non-GAAP measures which are adjusted from the most
directly comparable GAAP results to exclude items related to the
amortization of intangible assets, amortization of acquisition-related
intangibles, expensing of appraised inventory fair market value step-up,
inventory valuation adjustments, purchased in-process research and
development expenses, restructuring, asset impairments and other, net,
goodwill impairment charges, gains and losses on debt prepayment,
non-cash interest expense, their related tax effects, actuarial (gains)
losses on pension plans and other pension benefits, and certain other
special items, as necessary. Management does not consider these charges
in evaluating the core operational activities of ON Semiconductor.
Management uses these non-GAAP measures internally to make strategic
decisions, forecast future results and evaluate ON Semiconductor’s
current performance. In addition, we believe that most analysts covering
ON Semiconductor use the non-GAAP measures as well. Given management’s
and other relevant use of these non-GAAP measures, ON Semiconductor
believes these measures are important to investors in understanding ON
Semiconductor’s current and future operating results as seen through the
eyes of management. In addition, management believes these non-GAAP
measures are useful to investors in enabling them to better assess
changes in ON Semiconductor’s core business across different time
periods. These non-GAAP measures are not in accordance with or an
alternative to GAAP financial data and may be different from non-GAAP
measures used by other companies. Because non-GAAP financial measures
are not standardized, it may not be possible to compare these financial
measures with other companies’ non-GAAP financial measures, even if they
have similar names.

Non-GAAP Gross Profit and Gross Margin

The use of non-GAAP gross profit and gross margin allows management to
evaluate, among other things, the gross margin and gross profit of the
company’s core businesses and trends across different reporting periods
on a consistent basis, independent of non-cash items, including,
generally speaking, expensing of appraised inventory fair market value
step-up and amortization of intangible assets. In addition, it is an
important component of management’s internal performance measurement and
incentive and reward process as it is used to assess the current and
historical financial results of the business, for strategic decision
making, preparing budgets, obtaining targets and forecasting future
results. Management presents this non-GAAP financial measure to enable
investors and analysts to evaluate our revenue generation performance
relative to the direct costs of revenue of ON Semiconductor’s core
businesses.

Non-GAAP Net Income and Net Income Per Share

The use of non-GAAP net income and net income per share allows
management to evaluate the operating results of ON Semiconductor’s core
businesses and trends across different reporting periods on a consistent
basis, independent of non-cash items, including, generally speaking, the
amortization of intangible assets, amortization of acquisition-related
intangibles, expensing of appraised inventory fair market value step-up,
purchased in-process research and development expenses, restructuring,
asset impairments and other, net, goodwill impairment charges, gains and
losses on debt prepayment, non-cash interest expense, their related tax
effects, actuarial (gains) losses on pension plans and other pension
benefits, and certain other special items, as necessary. In addition,
they are important components of management’s internal performance
measurement and incentive and reward process, as they are used to assess
the current and historical financial results of the business, for
strategic decision making, preparing budgets, obtaining targets and
forecasting future results. Management presents these non-GAAP financial
measures to enable investors and analysts to understand the results of
operations of ON Semiconductor’s core businesses and to compare our
results of operations on a more consistent basis against that of other
companies in our industry.